NSW Premier Chris Minns takes a brutal swipe at Victoria as war of words escalates

An internal Labor fight over the annual GST distribution has escalated as Victoria’s Treasurer accuses NSW of being a “welfare recipient” in response to his claims that the most populous state has changed too little.

The Commonwealth Grants Commission on Tuesday announced the recommended GST distribution for 2024/25, with national revenue estimated to grow from around $85 billion in 2023/24 to $89 billion.

Under the distribution, NSW and Queensland’s share of the GST pool will fall as rising coal royalties have put them in a stronger fiscal position.

Victoria is expected to receive almost $3.7 billion more than in 2023/24, while NSW will receive $310 million less.

The division has sparked a civil war between the Labor states, with NSW Premier Chris Minns describing Victoria on Thursday as a welfare state that is “taking money out of the pockets of NSW families”.

Victorian Treasurer Tim Pallas fired back on Friday, saying not a single dollar of NSW GST went south of the border, calling Mr Minns “mathematically challenged”.

“He may not be the sharpest tool in the shed, but he is a tool,” he told reporters in Melbourne.

“He has completely misunderstood the GST break.”

Referring to Mr Minns’ “welfare state”, Mr Pallas suggested NSW had been a “welfare recipient” of Commonwealth infrastructure for decades, at the expense of Victoria.

“It’s just that Sydney, the Premier of NSW, is shouting outrage at the fact that we are almost getting a fair share of GST and lamenting Melbourne’s success,” Mr Pallas added.

“It humiliates him, it belittles his state.”

But the NSW Premier doubled down on his criticism, repeatedly questioning whether the adverse distribution was “planned or accidental”, and said the entire GST system needed to be fixed.

“The only thing worse than Victoria taking our money is them crying about it afterwards,” he told reporters on Friday.

Mr Minns has called for a per capita GST split, with additional resources distributed through grants to states and territories that need further support.

Such a system would benefit the larger states, which receive less GST per capita than they rake in, but would leave South Australia, Tasmania, the ACT and Northern Territory pocketing less.

Chris Minns doesn’t expect the GST meeting between state and federal treasurers to be friendly

“If the states are going to eat, NSW can’t eat last every time,” Mr Minns said.

“This is public money, it is not government money, it belongs to the people of Australia and it must be distributed fairly.”

But the idea was shot down by Mr Pallas.

“It really just conveys entitlement and selfishness,” he said.

He also said Victoria remains committed to ceding some of its GST to poorer states.

The war of words could make for an awkward virtual meeting between state and federal treasurers on Friday.

Mr Minns said he did not expect the meeting to be friendly, but State Treasurer Daniel Mookhey had no choice but to put forward the best case as key negotiations on education, health and infrastructure financing deals continue.

Federal Labor leader Jason Clare was unimpressed by the friendly fire, saying the same ‘argy-bargy’ happens every year when the grants committee makes its independent decision.

“I’m old enough to remember Bob Carr making the same argument against John Howard,” he told Seven’s Sunrise programme.

Deputy Opposition Leader Sussan Ley termed the GST battle as ‘blokey’ and urged state leaders to hold constructive talks.

“This all sounds a bit shouty and loud and I would suggest to Labor leaders that they perhaps cut back on testosterone production,” she said.